HomeContributorsTechnical AnalysisEURJPY Sails Sideways as ECB Rate Decision Looms

EURJPY Sails Sideways as ECB Rate Decision Looms

  • EURJPY eases into range-bound trading after 15-year high
  • Short-term outlook neutral, but will the bears return?
  • ECB policy announcement scheduled for Thursday 12:15 GMT

EURJPY has been moving back and forth between its 20- and 50-day simple moving averages (SMAs) following the pullback from a 15-year high of 159.75.

The short-term signals are mixed as the RSI is hovering around its 50 neutral mark, while the stochastic oscillator is trending higher. In the weekly chart, though, the indicators have peaked in the overbought region and are reversing south, reflecting a bearish bias.

Support is currently provided around the 50-day SMA at 157.13, while slightly lower, the ascending trendline drawn from the March lows at 156.00 could be the last opportunity for a rebound before selling pressure intensifies towards the 154.50 zone. The latter overlaps with the 23.6% Fibonacci retracement of the 137.37-159.75 uptrend. If the bears breach that floor too, the 153.00 round level could calm downside pressures ahead of the 38.2% Fibonacci mark of 151.20.

Should the bulls claim the 20-day SMA at 158.20, all eyes would turn to the short-term resistance line at 160.00. Running higher, the pair could enter a new consolidation phase within the 161.35-162.55 region, where the price stalled at the end of August 2008 and peaked in August-October 1998. Another success there might lift the price straight up to the 2023 resistance line at 164.80-165.00.

In brief, EURJPY is lacking direction in short-term picture, awaiting fresh volatility below 156.00 or above 160.00. 

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